Note for non-Australian visitors

In Australia "Liberal" is Right-Wing Neo-Cons; economically liberal, socially repressive, tax the poor to subsidise the rich. Republican is also a good thing, as opposed to being a lackey of the British monarchy.

Why do the poor get poorer and the rich get richer – the rich design their own tax system to make you pay

Give the rich more money, tax cuts (or in the words of the Right-wing neo-liberals “tax relief”), corporate handouts (“incentives”), upper-class welfare (tax deductions for lifestyle choices) and grants (free money), cutting red tap (removing workers rights) are all intended to make the wealthy create jobs. It does not work.

It’s a form of bribery known as “trickle down economics”, the rich are saying, now that we control most of the economy, give us all your money (actually taxpayer money) or we will crash it. It is a system of taxation that would leave most Mafia stand-over men envious.

The “job creators” say: All those incentives you have given us in the past to “create jobs”, and we didn’t… we’ll, if you give us even more money, this time we will, we promise, ruly, truly.

Trickle-down economics is a theory originating in the US that says if you give the rich enough tax dollars some of that flows down to the rest of the lower classes.

Economist John Kenneth Galbraith said this is just horse-and-sparrow theory: “If you feed enough oats to the horse, some will pass through to feed the sparrows”.

The reality of trickle-down economics is the rich stash their (your) money in Swiss bank accounts and the Cayman Islands and governments have to slash essential services in order to keep paying the rich more money.

Q. How would we pay for this neo-liberal, Right-wing trickle-down (which really should be abbreviated to the first five letters trick) under an Abbott government?
A. Austerity and Work Choices.

Lower wages for longer work, less government spending, higher taxes on the working and poor, lower taxes on the ‘job creators’, less ‘red tape’, less essential services, wage freezes, mass lay-offs – coming soon to an Austerity Liberal government near you.

This is the belief (or con job) that: Pay the rich more they work harder. Pay the poor less they work harder.

This will not work. Pay people a decent wage for the work they do and they will spend money on buying things the rich produce. Stop paying poor people, and they will stop buying things.

I have …a belief that no one, in this sea of riches, should have to be poor. But staring dumbfounded at the lessons unlearned in Britain, Europe and the US, it strikes me that the entire structure of neoliberal thought is a fraud. The demands of the ultra-rich have been dressed up as sophisticated economic theory and applied regardless of the outcome. The complete failure of this world-scale experiment is no impediment to its repetition. This has nothing to do with economics. It has everything to do with power.

This is the regime that the Liberal party will inflict on Australia. Don’t believe us? Look at Victoria, look at New South Wales, look at Queensland, is this working? No. This is the Liberal National Party’s agenda.

Why do working people and the poor vote for this? Do they believe that if they work harder enough, longer hours with less pay, that one day, too, they will inherit $30 million dollars, just like Gina did?

Ross Gittins has talked about the assault on wage-earners from the miners and large corporations

Their argument was that, if workers in Asian sweatshops were getting $2 an hour and ours were getting $15, ours were being overpaid by $13 an hour. If that makes sense to you, go to the bottom of the economics class.

Gina Rinehart wants you on slave wages, and if you are unwilling to accept it, she is quite happy for every Australian to be unemployed (high unemployment is favoured by the ultra-rich, as competition for jobs forces down wages).

Gina Rinehart: “Africans want to work, and its workers are willing to work for less than $2 per day. Such statistics make me worry for this country’s future.” (source)

And any guesses which Leader wants to help Gina in her quest for less-than-$2-wages? Let me whisper it in your ear:

The answer is: It’s Not Prime Minister Gillard.

Ms Gillard has said “We are not going to have wage rates the same as the wage rates in Africa. We’re not going to compete on those kinds of cost differentials”.

The ultra-rich miners have brought down prime ministers (eg. Rudd, Whitlam) in order to avoid paying tax. The ultra-rich would rather spend more avoiding paying tax than paying a little tax (think of the campaign against the mining tax, which ended the Prime Ministership of Kevin Rudd, and resulted in Gina Rinehart buying a stake in Fairfax, just so she would have to pay tax).

Because paying zero cents on the dollar sure is burdensome, just ask billionaire mining magnate Nathan Tinkler who brags about paying no personal tax, and doesn’t pay his bills either. Paying bills is for the little people.

So, austerity is just a con job, to slash your wages and give more taxpayer “incentives” to the rich so that they can lobby to avoid paying taxes.

The Labor government, despite what you hear in the media, is not an Austerity government.

Wayne Swan has been vilified in the media for preferring to keep the economy moving, by spending money, even if that means giving up the chase for the surplus. Good thing too. A surplus just means that the government is not spending money where it is needed.

Austerity has never workedIt’s not just about the current economic environment. History shows that slashing budgets always leads to recession

Do we want a society where 50% of young people are kept out of work in order to bring the deficit down from 9% of GDP to 3% in three years? A society in which the rich have to be made richer to work harder (at their supposed jobs of investing and creating wealth) while the poor have to be made poorer in order to work harder? Where a tiny minority (often called the 1% but more like the 0.1% or even 0.01%) control a disproportionate, and increasing, share of everything – not just income and wealth but also political power and influence (through control of the media, thinktanks, and even academia)?

Work Choices, you can work for $2-per-day, or starve. It’s your choice.

2 Comments to “Why do the poor get poorer and the rich get richer – the rich design their own tax system to make you pay”

great article – the tax lurks and perks and the obscene wages ( which have grown enormously ) of the CEO’s- benefit no one apart from themselves. Which is we we are having such a concerted campaign to get rid of this competent – and generally caring govt.